Employers' retreat signals change ahead in health insurance

MedSave Admin | March 19, 2009

Hewitt Associates reports that the number of employers considering dropping their employee health plans has quadrupled since the survey was last done a year ago. It is unclear whether the economic stimulus package's COBRA headaches caused this 400% increase in employer intention but sites like Workforce.com and Walletpop.com are quick to blame Obama's policy. MedSave.com believes that the report indicates more fundamental change in the market demand for health insurance, changing from expensive group coverage to less expensive individual mini-med insurance.

Hewitt Associates is one of the leading data sources in the employee benefits industry and their survey reports have been consistently reliable. Regardless of the cause of this market change, employers are signaling the significant increase in demand ahead for affordable individual health insurance plans ahead. Since many employees are paying only a small portion of their employer-sponsored health plans costs it is reasonable to assume that the affordability point for replacement coverage will be significantly less than the price of most convention major medical insurance plans today offered through major national carriers like Blue Cross, Kaiser, Aetna, Cigna and Wellpoint. Industry insiders report that these carriers are scrambling to design new lost cost health insurance plans to meet the changing insurance demand. Meanwhile some health insurance companies like Standard Security Life (Secure STM), Fairmont Specialty Insurance (American Health Shield), US Fire Insurance (Core Health Insurance) and US Life (Value Health Insurance) that already offer these types of mini-med policies are the beneficiaries of the market trend. Health Savings Accounts may expand their current market share through low cost insurers. UnitedhealthOne is the market leader that offers low priced health insurance and free administration of Health Savings Accounts.

The trend toward individual mini-med plans might hasten the transformation of some Blue Cross carriers from non-profit to for-profit status in order to better compete for market share. MedSave.com reports significant growth in these lower priced individual plans with flat or declining enrollment in traditional higher priced health insurance.

Tags : affordable health insurance

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